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Taking Flight: Why Shares of Santos Ltd are Rocketing Today

Shares of Santos Ltd (ASX: STO) have shot the lights out so far today!

The stock rocketed as much as 11.6%, compared to a mere 0.7% lift for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO). It hit a high of $4.38 this morning, up from the $2.46 low it hit in January this year.

Here’s how today’s gain looks in chart form:

Source: Google Finance

Source: Google Finance

Santos’ impressive gain comes after the Organisation of Petroleum Exporting Countries, or OPEC, agreed to curb production in order to support the resource’s price.

A number of other energy producers, including Woodside Petroleum Limited (ASX: WPL), BHP Billiton Limited (ASX: BHP) and Sundance Energy Australia Ltd (ASX: SEA) have also benefited. They’re up 5.4%, 4.8% and 17.1%, respectively.

Before jumping into the energy sector, however, remember that higher prices could well attract producers back into the market. That in itself could weigh on the resource’s price in the long-run.

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Motley Fool contributor Ryan Newman has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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